DOLE approves P15 daily wage increase

THE Department of Labor and Employment has approved a P15 pay increase for more than half a million minimum wage earners in Metro Manila, raising the daily minimum wage from P477.03 to P492.57 but labor groups criticized the move as an insult to Filipino workers.

Labor Secretary Rosalinda Baldoz said the pay increase, the 19th since the Wage Rationalization Act, became a law on June 9, 1989, will directly benefit 587,000 minimum wage earners who also would continue to be exempted from paying income tax on their wages, hazard pay, holiday pay, night shift differentials, and overtime pay.

“The take-home pay of our minimum wage earners will increase to P492.57 per day, or by 3.2 percent because of the wage hike, compared to the current P477.03 per day. They will also enjoy a higher 13th month pay and increased social security coverage,” said Alex Avila, National Capital Region director for the Labor Department.

“On the part of the employers, their effective labor cost per employee working six days a week will also increase by 3.2 percent, or P565.54 per day, compared to the current P547.87 per day,” he added.

The minimum wage hike is expected to be affirmed by the National Wages and Productivity Commission (NWPC) this week and published by the Regional Tripartite Wages and Productivity Board, and take effect 15 days after.

The Trade Union Congress of the Philippines (TUCP), the country’s largest labor group, tore into the government-approved wage hike.

“This amount is revolting. Rather than closing the gap between rich and poor, government officials in the wage board have further widened the gaping inequality amongst Filipinos—between a few elite and a famished majority who live to survive by the day,” said TUCP spokesman Alan Tanjusay.

“The 15-peso increase granted is unacceptable. Is this how much the Department of Labor and Employment (DOLE), the Department of Trade and Industry (DTI) and the National Economic and Development Authority (NEDA)—the majority members composing the wage board—rewards Filipino workers who contributed to improve and sustain the country’s high economic growth under the Aquino administration for so many years?”

The more militant Kilusang Mayo Uno (KMU) dismissed the pay hike as a ploy to blunt public calls for President Benigno Aquino III to resign.

“If Aquino thinks this wage hike will weaken workers’ protests calling for his resignation, then he is sorely mistaken. This meager wage hike is insulting to workers and does not address the government’s and big capitalists’ attacks against the minimum wage,” said Elmer Labog, KMU chairman.

“This is a nature of social injustice that either makes our productive young workers join the ranks of our Filipino brothers and sisters in the mountains to wage the battle on social inequality from there or forces them to swallow the bitter pill [and work] abroad at the expense of morally, psychologically and emotionally deprived children,” Tanjusay said.

But the Palace said the P15 wage hike was a “win-win compromise” that would augment workers’ income while ensuring that the companies that hire them remain financially viable.

The approved wage adjustment was significantly lower than the P136 increase being pushed by the TUCP.

“Traditionally, if you look at the positions of labor groups vis-à-vis employers groups when it comes to a wage hike, they’ve never been on the same plane or at least on the same level. The job of the Wage Board is to determine what can be given that will also not be detrimental to employers,” deputy presidential spokesperson Abigail Valte said.

“If you give too high—this is one of the considerations of Wage Board and they tell you as much—that if you give too high an increase, the employers will not be able to absorb it. So they also check what amount that can be a good compromise between the requests of the labor groups as well as the employers. That brings the total wage in NCR to P481, if I am not mistaken, and it’s good still.”

“Some will call it not enough or not sufficient but it’s still something to be given—something in addition to what they are already getting,” Valte added.

The new minimum wage rate will cover all minimum wage earners in the private sector in the National Capital Region regardless of their position, designation or status of employment and irrespective of method of payment.

Last year, the regional tripartite wage and productivity board did not issue any wage order for NCR.

According to the 2014 poverty survey conducted by the Philippine Statistics Authority (PSA), the incidence of poverty among Filipino families worsened to 20 percent in the first half of 2014, from 18.8 percent in the same period in 2013.

The survey also showed that incomes of poor families were short by 27 percent of the average poverty threshold of P8,778 a month or P293 a day for a family of five in the first semester of 2014.

In Metro Manila, which has the highest minimum wage rate in all 17 regions, the government said the real value of the current P466 minimum daily wage is P356.64 or P7,846.08 a month – or P932 short of the poverty threshold of P8,778 per month.